The yen touched the lowest point against the euro in three months after Japan’s current account surplus turned out smaller the market had expected, eroding the yen’s allure as a safe haven currency.
The yen fell 0.1 percent lower at 139.93 per euro as off 7:51 a.m. in London after earlier declining by 0.2 percent to 140.09, the lowest mark since May 14. The yen gained slightly against the dollar to trade at 102.43 up from 102.48. The euro rose 0.2 percent to $1.3665.
“Dollar-yen is starting to grind its way higher,” Greg Gibbs, a Singapore-based head of Asia Pacific markets strategy at Royal Bank of Scotland Group Plc told Bloomberg. “The current-account position, which is structurally very narrow, is almost invisible now. It takes away a level of support for the yen which had historically been there.”
The yen fell on data that showed that Japan’s economy grew the most since 2011, and a separate report that showed that China’s exports accelerated, fuelling the uptake of higher-yielding assets. Japan’s Ministry of Finance reported that the current-account surplus declined to 187.4 billion yen ($1.83 billion) in April. This was less than the surplus of 287.7 billion yen forecasted by analysts in a Bloomberg News survey.
Since 1996, Japan has repeatedly recorded annual surpluses that have cut its dependence on foreign capital and established the yen as a haven currency.
Japan’s economy rose by 6.7 percent on a year-on-year basis in the first quarter, the most since the July-September period of 2011, up from the initial reading of a growth of 5.9 percent reported in May. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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